REFERENCE POINTS AND THE THEORY OF THE FIRM
                        Oliver D. Hart

        ABSTRACT
In this article I argue that it has been hard to make progress on Coase's theory of the firm agenda because
of the difficulty of formalizing haggling costs. I propose an approach that tries to move things forward
using the idea of aggrievement costs, and apply it to the question of whether a transaction should be
placed inside a firm (in-house production) or in the market place (outsourcing).